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Tesla Q1 earnings: that’s a wrap
Thanks for joining our live updates. Here’s a quick rundown. Tesla missed earnings expectations with profits in the first quarter coming in 71% lower than the same period last year. And yet, stocks didn’t fall. They rose in after-hours trading.
Why? CEO Elon Musk did the one thing investors have been asking — pleading — with him to do and turn his attention back to Tesla. Sort of.
Musk is staying committed to the Department of Government Efficiency as long as President Trump will have him. But he will reduce his time with DOGE, which has slashed thousands of government jobs and gutted entire federal agencies. Starting in May, he will cut his DOGe time to a “day or two” per week. Musk said he will allocate this newly gained time to Tesla. Stocks moved higher after his comments.
During the earnings call, Musk also attempted to thread the political needle on supporting President Trump while disagreeing with his tariffs policy, stayed committed to launching a robotaxi service in Austin, made big promises on Optimus, and said a cheaper EV would go into production in June. Plus lots more.
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Drones and humanoids: China vs USA showdown
Elon referenced a post he reposted on X that said something to the effect of “any country that cannot manufacture its own drones is doomed to be the vassal state of any country that can.” And, per Musk, “America cannot currently manufacture its own drones.”
The comment was made in response to an analyst question about whether the U.S. or China was further ahead on the development of physical AI, specifically humanoids and drones. Musk noted that China makes 70% of all drones and anyone else has a dependency on China’s supply chain.
Tesla doesn’t make drones, but it does make humanoids. And despite the fact that Chinese humanoid robots are already attempting to run half marathons (albeit not too successfully), have been deployed publicly and industrially at scale, and have strong government support, Musk said that there’s no company in any country that can match Tesla.
“Now, I’m a little concerned that on the leaderboard, ranks two through 10 will be Chinese companies, but I’m confident that rank one will be Tesla,” he said.
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Elon likes predictable tariff policy and free trade
Elon stood by President Trump during the earnings call. But when you pay close attention to how he talked about tariffs, it’s clear there is some disagreement.
After noting he was one of many advisors to President Trump and is not the president, Musk struck a measured and diplomatic how-do-I-thread-the-political-needle tone. Musk said he is hopeful Trump “will observe whether my predictions on tariffs are more accurate than others, and perhaps weigh my advice differently in the future.”
Musk then stated he is an advocate of “predictable tariff structures,” and generally supports “free trade and lower tariffs.”
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Tesla’s robotaxi fleet will be small to start
The company is still debating how many Tesla robotaxis — and reminder not Cybercabs — will be in its self-driving service fleet when it launches this June in Austin. Musk didn’t seem too settled on the number, exclaiming it might be 10 to 20 vehicles on “day one” of the service.
From here, he said the fleet “would scale it up rapidly after that.”
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We’re running long
More than an hour into the call – the usual cutoff for these things – we are now finally getting some questions from analysts who’ve been waiting on the phone. The first question is a mostly glowing one from Pierre Ferragu comparing Tesla to the iPhone and the competition to the flip-phone makers.
Musk says it was obvious to him at the time that smartphones were the future. But he also says “the reality is that, in the future, most people are not going to buy cars.”
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Waymo 4: Tesla 0
Elon joked (a couple of times) that Waymo cars cost “way mo’ money” because they require lidar and radar, in addition to cameras, to operate autonomously. Tesla wants to drive autonomously with only cameras, but it has yet to achieve full self-driving capabilities.
The goal is to get there soon with better AI and a whole lotta compute power. And that may work out for Tesla. It also may not.
Either way, Musk said that “I don’t see anyone being able to compete with Tesla at present,” despite the fact that Waymo is already commercially operating in four cities with plans for several more, and Tesla is commercially operating in zero cities.
Again, Musk is hanging his hat on Tesla’s promise to achieve autonomy with its current sensor suite of cameras and an end-to-end neural network approach that has been trained on billions of examples of real-world data. Then Teslas in the land will be able to turn into robotaxis with nothing but a software update. No mention though about all of the Tesla vehicles that will require a hardware update to achieve that goal.
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Bueller?
We’re almost an hour into this call and so far the only questions that have been asked have been the shareholder-submitted ones – and almost all of them have been already answered. Not one question from the analysts waiting on the phone yet.
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Musk learns about Operational Design Domains
In keeping with his longstanding pattern of “refusing to learn any lessons from the way things have been done before,” Musk just admitted on the call that he thinks it’s “increasingly likely that there will be a localized parameter set” for Tesla’s upcoming robotaxi service.
He waxed on about how human drivers can be good in California, but bad in New York snow, and so Tesla is looking at setting these “parameters” – he didn’t define them – for different places.
There is a term for this already: Operational Design Domains. And it’s how Waymo (and other AV companies) have been approaching the problem of self-driving vehicles for years. Musk has spent years claiming Tesla will come up with a general self-driving solution that will work everywhere, but once again he seems to be changing his tune.
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Elon makes another AV promise
Musk said we would see “millions of Teslas operating fully autonomously” in the second half of “next year.”
Sound familiar? It’s because it is! Elon has promised that Tesla would achieve autonomy at scale “next year” for at least a decade. Later, he pulled out another oft-repeated autonomy promise. And it involves sleep.“So, you know, the acid test being you should be able to go to sleep in your car and wake your destination,” he said. “And I’m confident that will be available in many cities in the U.S. by the end of this year.”
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The affordable EV yoyo
Tesla is doing a cheap EV! No, wait, it’s not, it’s doing a Cybercab! Got whiplash? Same. As of today, Tesla says it will start production of a more affordable EV this June. This is the first time Tesla has noted the month for start of production.
“To summarize, we have near term challenges in our business due to tariffs and bad image,” Taneja said. “Fitting our strategy of providing the best product at a competitive price is going to be a winner, and this is the reason we still focus on bringing cheaper models to market.”
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Bitcoin leads to increased volatility for Tesla
Taneja said that the adoption of a “new market standard” for Bitcoin is leading to increased volatility in Tesla’s “other income” section of its balance sheet. Tesla recorded negative $119 million in “other income”, compared to positive $595 million in Q4 2024.
This isn’t the first time Tesla has lost money on Bitcoin. In 2023, Tesla recorded a $204 million loss in Bitcoin holdings.
Also throwback: Remember that time Musk said you could buy a Tesla with bitcoin?
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Thousands of Optimus bots by EOY
Elon Musk made some big promises on the Optimus robots.
“We expect to have thousands of Optimus robots working in Tesla factories by the end of this year,” Musk said. “And we expect to scale Optimus faster than any product I think in history to get to millions of units per year as
soon as possible.”Per Tesla’s shareholder presentation, the automaker is on track to build Optimus at its Fremont pilot production line this year.
He then noted he feels confident in getting to a million bots per year in less than five years, “maybe four years.” You heard it here first! Start the clock.
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Tesla earnings wrap up: Elon Musk talks DOGE, Trump and tariffs, robotaxis, AI, and cheap EVs
Tesla earnings day is here, and boy oh boy, this one could be a doozy. In the past several months, one of the world’s largest EV makers has seen its market share fall. That’s partly because of increased competition in China, Europe, and North America. But it’s also due to CEO Elon Musk’s political alignment with President Trump and his activities under DOGE to slash federal jobs and insert his supporters into positions of power.
People have expressed their opposition to Musk and Trump through the Tesla Takedown protest movement; others have sold their Tesla vehicles and stock. Those actions are beginning to take a toll.
Tesla, and more specifically Musk, have tried to focus the conversation on the future — namely the promise of AI. Will it work? We’ll find out.
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